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Pierre Karl Peladeau, right, president and CEO of Quebecor Inc., and Kory Teneycke, vice president of development of Quebecor Media, announce the companies' investment in the creation of a new English specialty channel called Sun TV News in Toronto on June 15, 2010.

Reuters/Mike Cassese

In its application to operate the Sun TV News channel, Quebecor Inc. argued its all-news specialty station was poised to create "a completely new genre in Canada." Now, it appears the federal broadcast regulator disagrees.

In a private letter sent to Quebecor on July 5, the Canadian Radio-television and Telecommunications Commission rejected Quebecor's request for a rare must-carry license. It would have guaranteed distribution by all cable and satellite firms - and the subscriber fees that come along with that distribution.

The license Quebecor requested - known as a Category 1, soon to be Category A - is rarely granted, and in March of this year, the CRTC announced that it would not consider any new applications for those licenses before October, 2011.

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Quebecor applied anyway, asking for special consideration. Its reasoning, according to the letter, was that Sun TV News would be "an Information & Analysis channel," and therefore different than its all-news competitors.

The CRTC rebuffed that claim. In the letter, Peter Foster, the director general of television policy and applications, suggested that there was little to distinguish Sun TV from other all-news services, since "news and analysis are sub-categories of the information programming category … news would be broadcast throughout the day … [and]in promotional material, the proposed service is referred to as the Sun TV News Channel."

Quebecor now has two options. It can apply for a standard Category 2 specialty service, which is relatively easy to obtain: it simply creates a digital specialty channel, and the onus is on the people running the channel to negotiate distribution with cable and satellite companies.

"Therefore, it would appear to be a relatively straightforward process for your proposal to be amended to be an application for a licence to operate a competitive news service, which could be considered without delay," Mr. Foster wrote.

The other option is for Sun TV to remain an over-the-air broadcast station, and simply change its programming to the proposed all-news format. Distributors could choose to pick up that signal - the station has transmitters in London and Toronto - and potentially carry it across the country. However, it would not receive any of the fees given to specialty channels.

But Kory Teneycke, the head of the project, said Quebecor will not pursue the second option.

"We're looking for a cable specialty license. That's what our initial application is for, and that's what we're aiming for," he said.

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Quebecor will soon submit "an amended application," Mr. Teneycke said. He would not comment on the details of that application, or whether the company would request a standard Category 2 license.

"We're not particularly fazed by that letter. We're focused on moving forward," Mr. Teneycke said. "We're confident that we'll have a licence in time for our projected launch, and one that will satisfy our needs on the business side."

The channel is set to launch on Jan. 1, 2011.

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